Most people are familiar with identity theft. They understand that they have to take various measures to protect their financial information from being accessed and exploited by criminals. Unfortunately, many people are less familiar with tax return identity theft. Numerous taxpayers have found that criminals have pocketed their tax refunds after using false identities. How can you reduce the chances that you could become a victim of tax return identity theft? The following tips should help.
File your tax return as soon as possible, especially if you anticipate a tax refund. By filing early, you limit the time available to criminals to file a fraudulent return in your name.1
Criminals typically use email or a phone call to try and get taxpayers to reveal personal information. Very often, they pretend to be IRS officials attempting to verify the accuracy of your Social Security number or some other crucial piece of personal identifying data. This is known as "phishing." The reality is that the IRS never asks for financial or other personal information online or by email or text and never calls to demand immediate payments of back taxes, interest, or fines -- it simply mails a bill to taxpayers.
And remember to keep your computer secure. Use security software that updates automatically and includes a firewall, virus/malware protection, and file encryption for sensitive data.2
Do not carry your Social Security card or any documents that list your Social Security number in a wallet or pocketbook. Keep old tax returns and tax records in a secure location and shred any tax documents before disposing of them. Regularly check your credit report and bank and credit card statements. And don't share too much personal information on social media that can be used to impersonate you.3
If you are a victim of tax-related identity theft, respond immediately to any IRS notice and submit Form 14039, Identity Theft Affidavit. Be sure to file a complaint with the Federal Trade Commission at identitytheft.gov. Follow up and contact one of the three major credit bureaus to have a "fraud alert" placed on your credit records, and contact your financial institutions.4
For more information on protecting yourself from identity thieves, visit www.irs.gov.Source/Disclaimer:
1National Endowment for Financial Education, 2019.
2IRS Publication 4524, Taxes. Security. Together., Security Awareness for Taxpayers, 2021.
4IRS Publication 5027, Identity Theft Information for Taxpayers, 2018.